Shares of RR Kabel Ltd, a prominent player in the wires and cables sector, surged significantly on Monday, May 5, 2025, following the release of the company's impressive fourth-quarter financial results for the fiscal year 2024-25. The stock climbed as much as 14% during intraday trading, reaching a peak of ₹1,211 per share, before settling at ₹1,157.7 on the National Stock Exchange (NSE) by 9:34 AM.
The company reported a remarkable 24.4% increase in revenue from operations, totaling ₹2,217.8 crore for the March FY25 quarter, compared to ₹1,754.1 crore in the same period last year. This performance was buoyed by strong demand in the wires and cables segment, which alone saw a year-on-year growth of 28% and a segment profit increase of 47% in Q4 FY25.
RR Kabel's earnings before interest, tax, depreciation, and amortization (EBITDA) rose by an astonishing 69.4%, reaching ₹195.8 crore, up from ₹115.2 crore in the previous year. The EBITDA margin also improved significantly, climbing to 8.8% from 6.6% in Q4 FY24.
Shreegopal Kabra, the Managing Director of RR Kabel, expressed his satisfaction with the results, stating, "RR Kabel has delivered a strong performance in Q4FY25, led by robust volume growth in our wires and cables segment—driven by improved demand, favorable copper prices, and strategic capacity expansion. We remain focused on scaling up cable volumes while sustaining strong growth in wire sales." He further noted that the company's fast-moving electrical goods (FMEG) segment also demonstrated solid momentum with a 13% revenue increase.
Despite the positive quarterly results, the overall volume growth for the full fiscal year was 7.1%, which fell short of the management's guidance of 15%. This discrepancy has raised questions among analysts regarding the company’s capacity to meet its ambitious growth targets.
In response to the rising competition within the wires and cables market, RR Kabel has announced plans for significant capacity expansion. The company intends to add 36,000 metric tons (MT) of capacity at its existing Waghodia plant in Gujarat, with a projected investment of ₹1,050 crore. This expansion is expected to be completed by March 2028. Additionally, RR Kabel is set to enhance its new unit at Silvassa, and Daman & Diu, with a proposed capacity addition of 6,000 MT, supplementing the 12,000 MT already underway, which is expected to be operational by March 2026.
RR Kabel has laid out a three-year strategic vision dubbed "Project R Rise," aiming for its wires and cables business to achieve a compounded annual growth rate (CAGR) of 18%. The company also anticipates a substantial increase in exports, expecting to grow at 1.8 times the current size, and an overall capacity increase to 1.7 times the current levels. The FMEG revenue is projected to grow at a CAGR of 25% over the same period.
Market analysts have responded positively to RR Kabel's performance, with eight out of nine analysts covering the stock maintaining a "buy" rating. The stock's strong showing in the Nifty 500 index has made it one of the top gainers, reflecting investor confidence in the company's future prospects.
In addition to its robust financial performance, RR Kabel's board of directors has recommended a final dividend of ₹3.5 per share, which accounts for nearly 70% of its ₹5 face value. This follows an interim dividend of ₹2.5 per share declared in October 2024. The final dividend is expected to be approved and paid within a month of the upcoming annual general meeting.
RR Kabel's market capitalization currently stands at ₹13,161.69 crore, and the stock has shown resilience, recovering from a 52-week low of ₹750.5 per share recorded on April 7, 2025. The share price had previously reached a high of ₹1,903.30 on May 27, 2024, demonstrating the stock's volatility and potential for recovery.
Brokerage firm Motilal Oswal has maintained a neutral rating on the stock, indicating that it may reassess its position following a conference call scheduled for later today. They noted that while RR Kabel's results exceeded expectations, challenges such as fluctuating copper prices and increasing competition in the wires and cables sector could pose risks to future performance.
In summary, RR Kabel's latest financial results and strategic plans have generated significant interest among investors, driving the stock price to new heights as the company positions itself for future growth amidst a competitive landscape. With a clear focus on capacity expansion and market share enhancement, RR Kabel appears well-equipped to navigate the challenges ahead and capitalize on emerging opportunities in the electrical goods sector.
